Tax Exemption on Software Export

Tax Exemption on Software Export - Printable Version

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Tax Exemption on Software Export - DLight - 04-17-2010

Hi all,

Referring to clause 133 of section 53 in Income Tax ordinance, there is exemption on income from IT/Software Services Export.

I work with a foreign company on contact basis (they don't have office in Pakistan, but a registered company in UK) as Software Developer (thus I am exporting my IT services to them).

I am an individual (doesn't have any company account etc) and all of remittances come into my personal account (from the company whom I work with). In this case, can I enjoy the tax exemption through this clause?

What documentation I will need to provide to claim this?

Any help is appreciated in advance.

- Nauman - 04-20-2010

Yes you will enjoy the exemption as source of income is exempted.

- awaisaftab - 04-20-2010

Income from exports of computer software or IT services or IT enabled
services is exempt from tax upto the period ending on 30th day of June, 2016.(See Clause 133 of Second Schedule of ITO,2001)

- DLight - 04-20-2010

Thank you both Awais Aftab and Nauman.
I am glad to know that I can enjoy this exemption.
I knew the the (IT and ITES) "companies" are exempt from this, but my concern was to enjoy same exemption being an individual.

I really appreciate your time to resolve my confusion. [)]

- triwhdxk - 05-06-2010

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by DLight
 Thank you both Awais Aftab and Nauman.
I am glad to know that I can enjoy this exemption.
I knew the the (IT and ITES) "companies" are exempt from this, but my concern was to enjoy same exemption being an individual.

I really appreciate your time to resolve my confusion. [)]
<hr height="1" noshade id="quote"></blockquote id="quote">

Dlight don't you have to provide UK company with invoices etc for your services. IS the UK company sending money from their company account or from personal account. If company account than invoices need to be provided by law in UK I think

Sorry, I know this through a friend of mine in UK.

regards,
triwhdxk

- DLight - 05-11-2010

Hello triwhdxk,

Thanks for your reply. You are right. I provide them invoices on monthly basis and then they send me the money through their company account.

Can you please let me know that has this to do something with my Income Tax matters someway?

Regards,

DLight

- zain_dada - 05-30-2010

Dlight u should fill return and claim refunds on account of any withholding tax (like on mobile cards,Ptcl bills etc)

- mirfawad - 08-25-2010

AOA

Export of software or IT Services or IT enabled services are exempt from Income Tax as per claose 133 of the Income Tax Ordinance 2001 but my question is that "what are the legal requirements under any law for showing the export of software or IT Services or IT enabled services? or
Just the receipt of export proceeds from banking channel is a sufficient evidence for showing export?

- LapTop - 08-25-2010

DLight Bhaiâ¦.

Ap agar FBR as registered hay as Business Individual yani ap ka NTN bana howa hay to Apny Business name say account open karyn or Business name say invoice issue karyn, tmam payment apny business Account may received karyn,,,, to ye income Exempt ho gi,

Or Annual Income tax return may apni ye income declare karyn,

- DLight - 08-25-2010

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by mirfawad
 AOA

Export of software or IT Services or IT enabled services are exempt from Income Tax as per claose 133 of the Income Tax Ordinance 2001 but my question is that "what are the legal requirements under any law for showing the export of software or IT Services or IT enabled services? or
Just the receipt of export proceeds from banking channel is a sufficient evidence for showing export?

<hr height="1" noshade id="quote"></blockquote id="quote">

I started this thread with almost same question. So from the opinions of experts (above) I can say "Yes receipt of export proceeds from banking channel is a sufficient evidence for showing export"

Regards,

- LapTop - 08-25-2010

Objection hay is baat pay,,
âYes receipt of export proceeds from banking channel is a sufficient evidence for showing exportâ

agar ap FBR may as Business Individual registered nahi han to ap return of income k trough apni ye income declare bhi nahi kar sakty,,,

or ap apni is income ko white income kabhi nahi sabit kar sakty.

- DLight - 08-25-2010

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by LapTop
 Objection hay is baat pay,,
âYes receipt of export proceeds from banking channel is a sufficient evidence for showing exportâ

agar ap FBR may as Business Individual registered nahi han to ap return of income k trough apni ye income declare bhi nahi kar sakty,,,

or ap apni is income ko white income kabhi nahi sabit kar sakty.

<hr height="1" noshade id="quote"></blockquote id="quote">

Ok thanks for correction.

Actually, I assumed that mirfawad is already registered with FBR as business individual and have an NTN against it.

Kind Regards

- mirfawad - 08-26-2010

Thanks Laptop and Delight for you cooperation.

It means that there is no need to obtain any license granting permission for export of software or IT Services as is the case with other goods for which you had to obtain license as "exporter" from Pakisran Export Promotion Bureau.

Yes i am registered with FBR but my NTN is of salaried individual and now i don't have any salary income. Does it need to be updated and further my bank account is with my personal name. Does the same also need to be changed?

- LapTop - 08-26-2010

ap sirf ye karyn k salaried individual say Business individual ban jayen, yani sirf apny NTN par Business add karwa layna, or jo business add karwayen gay usi business name say bank account open kar layna,

- mirfawad - 08-30-2010

Thanks Laptop for Your Help & Assistance.

I got some further information about the topic. There is aslo need to Register with Pakistan Softwar Export Board (PSEB), a kind of regulatory Body in Software industry.

As per new government regulations there is no need to obtain license for export of goods or software which were earlier required. Now you have to be a member of concerned regulatory body or association of relevant industry. The other requirements of LCs,form E, Bank Account erc are the same.

I have obtained this information from the following link-
[http//www.pakimportexport.com.pk/guide/export-documentation.php

I have not been able to find any legal reference to the above information but the same was available on more than one sites.